Mortgage broker: works with multiple banks/lenders and can shop around for you. Depending on the broker, he/she will get your loan through who ever has the lowest rate, the lowest payment, or the highest commission check to him (the BEST circumstance would be that one lender covers all 3, but that is RARE!).
Bank: if credit is excellent, you have a decent down payment (5-10% good, 20% better), they will likely give you the best rates since they are lending you their money directly.
Application process: you’ll need to gather last year’s W2s, 2 most recent paystubs, most recent statement from all loans/credit cards (YES, even the deferred student loans). Even though they’re deferred, most lenders will include minimum payment of the student loans UNLESS you can provide proof from the student loan that the deferrment period still has at least 6 months before they need to be repaid. This can be difficult to get from the loan company, so try to get this asap. Depending on the lender, you’ll also need 401k and possibly income taxes last two years. Basically, start gathering your paperwork on ANYTHING related to how to prove what you earn and what your credit card/car payment expenses are.
-You will get the BEST rate with at least 20% down. For a 70k house, this is 14k. It might be worth it to wait until FI’s new job allows you to save that. Another benefit to waiting until you have the 14k is that the monthly mortgage payment (and overall interest paid over the next 30 years) will also be lower since you’ll be borrowing less money.
-Multiple credit pulls within 14 days only count as ONE pull. This means once you give them the ok to pull your credit, SHOP AROUND for the next 10 days and let them pull your credit. A lot of scummy loan officers will feed you some line of crap about how you shouldn’t let anyone else pull your credit because if they do, your score goes down and they can no longer guarantee their rate quote. Don’t buy into it.
-Once you start the application process, ask the loan officer to provide you something called a Good Faith Estimate. This is basically a summary of what they are proposing to do and how much it will cost in fees. It will also tell you how much cash you need to give them to close the deal.
The general rule of thumb is get all your ducks in a row before talking to the loan officer; it makes the process go smoother, and having ACCURATE information about your income/expenses, etc improves the likelihood that what you get quoted will be very close to what you end up getting.